Have you ever thought of leasing your equipment and spreading the payment costs?

Leasing your equipment has a number of significant benefits.

Affordable Monthly Repayments - allowing you to plan your budgets

Quality Assets - While leasing an asset, the ownership of the asset still lies with the lessor whereas the lessee just pays the monthly expense. Given this agreement, it becomes plausible for a business to invest in good quality assets which might look unaffordable or expensive otherwise.

VAT is paid on each monthly payment, saving a large upfront VAT payment.

Tax Benefits - Lease payments are considered as operating expenses, and hence, of interest, are 100% tax deducible - See example below

Tax Relief Example Leasing V Upfront Purchase

PURCHASE

LEASE RENTAL

YEAR

CAPITAL ALLOWANCE

TAX RELIEF

YEAR

CAPITAL ALLOWANCE

TAX RELIEF

1st

18% of £1,000.00 = £180.00

Less 20% = £36.00

1st

12 rentals of £35.92

Less 20% = £86.22

2nd

£1000 - £180 allowance = £820
18% of £820.00 = £147.60

Less 20% = £29.52

2nd

12 rentals of £35.92

Less 20% = £86.22

3rd

£820 - £147.60 allowance = £672.40
18% of £672.40 = £121.03

Less 20% = £24.21

3rd

12 rentals of £35.92

Less 20% = £86.22

TOTAL TAX RELIEF WHEN PAYING CASH - £89.73

TOTAL TAX RELIEF WHEN LEASING - £258.66

Calculations Based On:

Equipment Price £1000.00 plus VAT

Lease Term 36 Months

Company’s Tax Rate 20%

The above is an example, we recommend you speak direct to your own accountant regarding calculating your tax benefits.

Would you like a free no obligation quote? - Click Here of call 01743 289418 for more information.

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